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What is a Subsidiary Ledger?

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A subsidiary ledger is used to keep track of the details for a specific control account within a company’s general ledger.

What is a Subsidiary Ledger?

Subsidiary ledgers track transactions within their control accounts in greater detail. Control accounts, sometimes called adjustment or controlling accounts, are summary accounts within the general ledger. For every control account, there is also a corresponding subsidiary ledger.

Transactions may appear in both the subsidiary ledger and the corresponding control account, but those transactions only appear as an ending balance in the control account.

The details of the transactions—where they came from, the dates they were paid, and what they’re for—are all tracked in the subsidiary ledger. The information within any subsidiary ledgers and the general ledger is then used to assemble the financial statements for a business.

Subsidiary ledgers can be created for any general ledger account, but they are generally most useful for instances of high transaction volume such as accounts payable, accounts receivable, inventory, or fixed assets.

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